Dear Jack: If advertising is so critical, and good ad men are so confident, why won’t they take their fee as a percentage of incremental revenues?
Quite a bit to unpack there, Pato. First, that confidence you speak of is actually a swirling mass of insecurities cloaked in conviction and belief. You live in Sydney, you should know that. With regards to fees as a percentage of incremental revenue, it’s complicated. Like everyone, good ad men already answer to outrageous KPIs and their remuneration is pegged against performance.
Thing is, there are so many factors that influence the success of a product, service, and campaign, determining their true value is hard to quantify.
You can measure the performance of an “asset” through digital channels, but evaluating what, which, or who contributed most to the collective result is difficult because of all the other influencing factors.
The best campaigns can’t save an average product or overcome a force majeure. But even an average campaign can be said to contribute to the success of a timely product.
Brands, too, are often reluctant to offer percentages. Many prefer standardised costs and extracting “more with less” from their marketing investments than potentially overpaying for what they consider a necessary evil. The industry has been commoditised and, in the battle for the bottom line, procurement is winning the war. Agencies are seen as vendors, not partners, in many instances, evaluated by costs per unit.
Many have and do operate on the principal you champion, but I’m sure you know there are many ways to – like accountants – re-categorise success to present it as a deductible failure to improve shareholder value.
I’m not saying the industry is broken ... but I knew a guy that took the agency business model to the bank and asked for a loan. They laughed at him.
Dear Jack: Does brand advertising work anymore? Everything seems so short term and tactical.
All campaigns are brand campaigns, whether you intend them to be or not. Every message and interaction creates an impression of your brand in the minds of consumers, regardless of your intent.
Dear Jack: There are debates about whether it is PR or it is advertising that is more functional and impactful. Do you think it is public relations (corp. communication) supporting advertising (above-the-line and below-the-line) or vice versa nowadays?
Grape, Hong Kong.
A bunch of things to pick through, there, Grape. One of the best things about public relations is the ubiquitous acronym. PR sounds important, like a cross between PM and ER. And sometimes it is the most important thing. But if your PR strategy consists of a poorly conceived event, and some banal social posts, it’s not going to amount to much more than column inches and media impressions with little positive effect on the brand or impact on its intended target.
Likewise, there are advertising campaigns deployed in media channels simply because people feel they have to be there, rather than if they should be there or have anything meaningful to say.
Here’s the thing: communication is not a zero-sum game. If there’s a debate going on about which is more functional or impactful, it’s probably more of a pissing contest between people who work in a vacuum, mistaken in their belief they are the centre of the universe and have all the answers. But no one does.
Advertising, PR, marketing, and branding are all part of the grand persuasion. Which one you leverage, or who leads, is a question of relevance to task, audience, and market.
What is the best lever to pull at the appropriate time? A good understanding of the problem and an insightful integrated strategy is critical. It’s not about who takes the lead, but what will be the most effective strategy to deploy, and at what time, and to who.
At the macro and micro levels, brands may only need PR, particularly when it comes to crisis management or influencing regulators. Advertising that reinforces the recovery strategy, or sways public opinion, can help.
At company and consumer levels, advertising may be the best way to get product news out there. It depends on the product and what position it’s at in its life cycle, the BCG Matrix, Ansoff Grid and Shell’s Directional Policy.
More than likely, it is a combination of efforts. Ultimately, objectives and strategy should lead, supported by PR, advertising and all marketing activities in the appropriate place at the appropriate time.
Jack So is co-founder and ECD of So Fuk Yu, the mythical Hong Kong agency in the pages of Richard Tong’s critically acclaimed neon-noir novels. Here, he quells concerns, solves problems and addresses the big issues with uncommon sense. Send your questions to AskJack@marketing-interactive.com.